Gender pay gap reporting cancelled due to coronavirus

The Government Equalities Office and the Equality and Human Rights Commission (EHRC) have announced their decision to suspend enforcement of the gender pay gap deadlines for this reporting year, which had required reporting of organisations’ April 2019 data by 4 April 2020.

In a joint statement, the Minister for Women and Equalities Liz Truss and EHRC chair David Isaac have commented: “We recognise that employers across the country are facing unprecedented uncertainty and pressure at this time. Because of this we feel it is only right to suspend enforcement of gender pay gap reporting this year.”

Although more than 3,000 employers (26% of expected reporters) have already reported, this decision means that there will no longer be an expectation on employers to report their data by the 4 April deadline. With the deadline just ten days away, many more employers will have already calculated their statistics over recent weeks and will be in a position to report anyway. These employers will still be able to report voluntarily, and it is expected that many will choose to do so.

Coronavirus and gender pay gap reporting

Even once the coronavirus pandemic is behind us, it will continue to have an impact on gender pay gap reporting. This is because the rules for calculation of pay are based on the pay period which includes the “snapshot” date of 5 April each year (for full details see our inbrief on gender pay gap reporting). 

The Gender Pay Gap Information Regulations require employers to omit from the pay gap calculations any employees who were on reduced rates of pay on the April snapshot date. In the present circumstances, this could be a large proportion of the workforce. Employers are currently grappling with the options for reducing costs by putting employees on no pay, reduced pay, or using the government’s “furlough” scheme to cover up to 80% of pay. In addition, many employees who are unwell or self-isolating may be on reduced company sick pay or statutory sick pay.

Accordingly, April 2020 is likely to be a very unrepresentative pay month for many employers. Since gender pay gaps are calculated from averages, the pool of people to be included could be dramatically smaller. For example, a clothes retailer who has had to send home its shop-floor workers on reduced pay may be calculating gaps from just the few head-office people who are left and able to do work from home.

The likely result is that the gaps to be reported could be radically different from previous years and will not give a meaningful picture of the employer’s actual pay practices. This means the government will also need to rethink employer reporting obligations in respect of April 2020 data.